The Benefits of Supply Chain Management for the Food Service Industry

In order to have a competitive advantage over other restaurants, you need to offer high quality goods at the lowest price possible. Supply chain management is necessary to restaurant operators because of this need to minimize product costs and bring order to what too often can be a chaotic business. It is the responsibility of management to ensure that all of the costs of the product life cycle are kept low so the company can offer reduced prices to their customers, resulting in profits. The following are the benefits you can reap by partnering with a strategic supply chain management group focused on cost management.

Reduced Costs. Supply chain management requires identifying the processes that increase cost without increasing the value of the final product. These processes do not add value and should therefore be eliminated.

Increased Efficiency. Resource consumption leads to increased production costs, which is more often than not the result of improper planning. A company that uses supply chain management can achieve efficiency of its operations since only those value adding actions are encouraged. This ensures that the organization’s processes flow smoothly and output keeps inline with the needs of the company.

Increased Output. A company that employs supply chain management can develop stronger close relationships with both its suppliers and customers. You will have better alignment of your needs with your selected suppliers, more options, better pricing and timely completion of orders. A company with a well –stocked variety of popular menu options will deliver on their brand promise to their customers, and will grow as a result.

Increased Profits. One of the best ways to increase a company’s profits is by making sure that costs are kept as low as possible. By embracing and applying strategic supply chain management to your operations, you are able to reduce costs because you are getting rid of wasteful processes. Since these are operating costs for the company, the savings on these costs reflect increased profits for the company.

Supply chain management can help you transform a traditional linear supply chain into an adaptive network, providing you with increased visibility into the supply chain so you can sense and respond quickly to changes and quickly capitalize on new opportunities. Moreover, you can lower operational expenses with opportune planning for procurement, manufacturing and transportation. Better product, ordering process, and execution tracking can lead to improvements in performance and quality, resulting in lower costs.

Source1 Purchasing is a leading strategic sourcing group focused on cost management, savings and operational efficiency for the lodging, restaurant and food service industries.